Customs, Excise and Gold Tribunal - Delhi
Paras Electricals Pvt. Ltd. vs Collector Of C. Ex. on 16 April, 1996
Equivalent citations: 1996(88)ELT140(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1. The appellants, herein, manufacture photo-copier machines falling under sub-heading 9009.00 of the Central Excise Tariff Act. They filed a declaration under Rule 57G indicating the inputs intended to be used in the final product. This declaration in respect of inputs for photo-copier was made as "parts, accessories and components". These parts and components were declared to fall under heading 9033.00 CETA, 1985. The department found that besides availing of Modvat credit on parts and components falling under Heading 9033.00, the appellants had also availed of Modvat credit on inputs on parts and components falling under various other chapters 85, 70 of CETA and under various sub-headings thereunder. Therefore, proceedings were initiated against the appellants on the ground that inputs falling under other than Chapter 90 were not inputs for which any declaration has been made at under Rule 57G and Modvat availed of on these inputs was sought to be recovered. The jurisdictional Assistant Commissioner, however, on considering the reply of the appellants, dropped the demand. The Commissioner of Central Excise, New Delhi, therefore, sought to review the Assistant Commissioner's order by issuing a direction under Section 35E(2) of the Central Excises and Salt Act, 1944 and moved the Commissioner of Central Excise (Appeals) for review. The main point for determination in this review application was that the appellants had declared parts and accessories and components under Heading 9033.00 and that therefore, the other inputs on which Modvat credit has been availed of by the party which fall under sub-headings, 8534, 8544, 8536, 8501, 8504, 7003, 8532, 8541, 8542,8531, 8545, 8533, 9009, 7020 and 7318 cannot be said to be covered in the Modvat declaration. The Commissioner (Appeals) held that the appellants had themselves restricted the declaration of input by indicating the Tariff Heading 9033.00 in their declaration. Therefore, the Commissioner (Appeals) was of the view that in respect of parts and accessories falling under other tariff sub-headings, there was effectively no declaration at all and that when the description given is broad, which was obligatory on the part of the appellants to pin point at least the correct sub-heading to make it more specific. The Commissioner (Appeals) found that the appellants have failed to do so. He, therefore, concluded that the denial of Modvat credit should have been ordered by the Assistant Commissioner in respect of parts, accessories and components not covered by Tariff Heading 90.33 since such inputs are not declared under Rule 57G by the appellants.
2. Ld. Sr. Counsel, Shri A.N. Haksar, appearing with the ld. Counsel, Shri Y.K. Kumar, contended that having said so in his order, the Commissioner (Appeals) ultimately ended up by totally allowing the department's appeal which resulted in the appellants not being eligible for Modvat even on the declared inputs under Heading 90.33.
3. Shri R.A. Shaikh, ld. D.R., however, submitted that the appellants will not be eligible for Modvat credit on inputs for which they have not given specific declaration and cited case law to support his argument that mere broad description of inputs may not suffice. In reply, the ld. Counsel cited the Tribunal decision in the case of Rajasthan Transformers and Switch Gears v. Collector of Central Excise, Jaipur reported in 1995 (7) RLT (CEGAT-NRB) and submitted that even broad description of inputs should be acceptable for Modvat purposes if the private statutory records maintained by the assessee show the real utilisation of the inputs.
4. We have considered the submissions made by both sides. The description of the inputs in the declaration filed by the appellants is definitely very broad and in such a situation, the rule prescribing declaration viz. Rule 57G does require the description in the declaration to be specific enough for the department to ascertain that the basic requirement for Modvat credit is satisfied, namely, that the inputs is one which is used in or in relation to the manufacture of the final product. Therefore, when there is a declaration which merely describes the inputs as parts and components and this declaration is given, by the assessee, with corresponding tariff heading, the department would be justified in confining the Modvat credit facility to those inputs which really are covered by the descrition of the tariff heading contained in the declaration. The order of the Commissioner (Appeals), in fact is also to the effect that the benefit of Modvat should be confined to those inputs which would fall under Heading 90.33. However, the Commissioner (Appeals) should have given the direction to the Assistant Commissioner to extend to the appellants, the Modvat credit available for those inputs which did fall under Chapter 90 CETA 1985. Since, he has not done, we modify the order of the Commissioner (Appeals) and direct the jurisdictional Assistant Commissioner to extend Modvat credit to the appellants in respect of such of those inputs which would fall under Chapter 90. Ld. Sr. Counsel before us also raised a point of limitation as regards some of the demands saying that the department cannot invoke the longer period for recovery of the duty. We leave this aspect to be considered by the Assistant Commissioner in the absence of any findings for determination, according to law with reasonable opportunity to appellants. The appeals are disposed of in the above terms.